Permabull Tom Lee thinks the price of bitcoin could surpass the previous all time high of about $20,000 by the end of this year.
Lee pointed out that “It’s gone negative on correlation to the equity markets and now it’s positively correlated to gold. So I think Bitcoin is proving itself this year to be a hedge against global risks.”
“Institutional source of diversification,” says Lee will “help it propelled to highs.”
Check out clip from CNBC below, we’re also including the transcript in case you can’t see the video. All rights belong to CNBC and please refer all credits to CNBC.
It was a rough day on Wall Street stocks closing out their.
worst day of twenty nineteen Tech energy financials bearing the brunt of today’s pain. So what’s next for your money?
Let’s bring in fun straps. Head of research Tom Lea. Tom. Great to have you with us.
Your urine price target is thirty one twenty five. How are you feeling about that today?
Uh, still feel really confident about it. I mean, I feel like we’re watching another horror movie. A movie trailer, right? That miscommunication trump tweets. China retaliates. But,
at the other day, I think you know us Still is the equity, Tina, right? There’s no other place to go. I think the PM eyes they’re going to strengthen by the end of the year. The long term eel curves been communicating that for sixteen months. And, you know, this is the best year for equities since two thousand nine. So as much as I understand why markets are nervous, I still think this is a bullish set up.
You’re not worried about the possibility of a currency war?
Uh, yes. I think that they’re, um not only their currency war. I think that there’s a lot of nervousness across a lot of markets, but I think the US is still pretty well positioned fundamentally. And I think, you know, if you think about how much is priced in, you know, the vics term structure inverted today. So I mean, it’s not like markets are just discovering nervousness. They’ve been nervous for six days, and today was a big crescendo.
So the bond markets are insisting we talk about this all the time. Twenty now five percent of all sovereign bonds, negative yields, Swiss fifty year yields or nay. I mean, some stuff that you would never even considered ten years ago. Is any of this problematic at all?
I mean, it’s it’s really speaks to, I think the divergence of demographics know me. To make things even worse, high yield bonds in Europe have negative yields, right? Fourteen heil issuers issuing it, negative rates,
population where populations been shrinking. We have negative yields. And so I think it’s a deflationary stood up us is still growing,
organically, and I think real GDP and I think US corporate profits are strong, so I think it’s a divergence if you look at S and P versus rest the world. It’s really broken up to new highs. I mean, we’re talking fifty year highs, and I think that that’s really the next couple. Your storey.
So global turmoil, volatility and in the equity markets,
currency, a currency war. Those would all be good things for Bitcoin. And yet you don’t necessarily think that, for instance, there’s a currency war that’s going to happen. So why do you think that coin is going to launch to new highs on the back of all this?
Yeah, well, Bitcoins did something pretty interesting this year. You know, the last couple of years it’s been really correlated to dollar, so weak dollar has been good for Bitcoin. Strong has been weak and it’s been really correlate to risk markets this year. It’s dealing from the dollar because the dollar has been strong. Bitcoins been up, which is a real breakage. It’s gone negative on correlation to the equity markets and now it’s positively correlated to gold. So I think Bitcoin is proving itself this year to be a hedge against global risks.
I think that makes an authentic institutional source of diversification. I think that’s gonna help it propelled new highs,
is a contradictory though, Tom, for you to say we’re confident about a rally to thirty one twenty five. We don’t see all of these worries and everybody else’s factory in his worries as Azriel threats. And yet we do see Bitcoin rallying because it’s going to be a hedge against sure,
I think, yeah, it’s so you know, not to be too glib. Zombie. Going to thirty one twenty five is, you know, is a five percent in the second half of twenty nineteen. So it’s basically what you expect in a normal year for equities. After really strong first half do does S and P and Bitcoin have to move up on the same days. They don’t.
You know, we’ve sort of been bullish on Bitcoin because crypto winners over and the technicals are improving. And I think there’s ah, whole road map of how there’s more Fiat to crypto on ramps developing. That’s really bullish for Bitcoin, but it doesn’t have to be bullish for equities.
Alright, Tom, Great to see you.
family. Ah, funds threat.
What do you?
think that coin goes now?
I think certainly new highs. I mean, so the one of the one thing that I would say about Bitcoin for the first time since I’ve been in an instance, twenty thirteen. We’re actually starting to see really institutional players, using Bitcoin as a hedge and buying into Bitcoin. That was not the case a few years ago. If you remember in twenty seventeen, we’re all waiting for this hard to come and they never showed up. The herd is here right now, and people are allocated to it. So that is a change this year.
So the store of value, part of the Bitcoin Storey, is changing now from the the alternative to central banks and Fiat currencies, would you say, is I mean,
yes, I think I think people that the narrative, why you own Bitcoin is starting to unfold in front of our eyes were seeing that happening with these currency wars. And the thing about Bitcoin don’t get too far up here, but it’s reflexive. So the higher it goes, the more you want to own of it because it’s a better store of value as it goes up.
You are like many people out there watching the show, and you don’t want Bitcoin and don’t think it’s a hedge there plenty people fall into that camp. If not Bitcoin, then what? As your hedge in times like this?
Oh, well, I mean, first of all, U. S. Treasuries, they’re gonna go lower. And if you look at the relatives, spreads between Europe and all these fifteen filling in negative yielding bonds, but also a flight to quality, you’re going to get that. There’s no question Gold gold took basically five years to break out through thirteen fifty. And we’ve had a couple now surges in the last,
two months that have not been reinforced that move, but certainly tell you that gold could go higher.